Natural Killer (NK) cells are an important effector cell type of innate immunity. Murine NK cells use an array of inhibitory Ly49 receptors that discriminate 'self from 'missing-self. NKG2D is a major NK activating receptor that interacts with ligands such as H60. Inhibitions mediated through the Ly49 are thought to globally affect the NK cell functions. However, the possibility of Ly49 dictating specific effector functions has not been explored. Therefore, propose that the strength of the Ly49-mediated inhibition would help determine the type of effector functions NK cells to perform. Towards understanding this interplay, we hypothesized that NKG2D-mediated activation is a function of altering the balance in the signaling strength between the activating NKG2D and inhibiting Ly49 receptors. To define this phenomenon of 'altered- balance', we used H60 as the activating ligand for NKG2D and analyzed the interplay between Ly49/MHC and NKG2D/H60 receptors. Although, our studies provided a firm basis of altered balance, there are many aspects of this interplay that are not yet understood. Therefore, we propose the following: In Aim 1, we will define the role of altered-balance in determining selective NKG2D-mediated effector functions such as cytotoxicity and cytokine generations. In Aim 2, we will generalize the altered-balance hypothesis using another NKG2D activating ligand Rae-1delta. In Aim 3 we will define the signaling events that determine selective effector functions of NK cells using Bcl10 knockout animals where we observed a specific defect in the cytokine secretion but not in cytotoxicity. Finally, in Aim 4, we will determine the molecular mechanism of cis interaction between the Ly49C and the endogenous MHC on the plane of NK cell membrane and its functional consequences. The experiments proposed here to test and refine the altered-balance hypothesis should provide a detailed understanding of how NK cell can measure environmental signals and respond to them. This is important for the understanding of the biology of NK cells. Mechanisms identified here will not only have practical implications in tumor and graft immunity but will serve as models for other systems in which the responding cell must balance a number of activating and inhibitory inputs.